Littelfuse, Inc.

Good day, everyone, and welcome to the Little Fuse Third Quarter 2021 Earnings Conference Call. Today's call is being recorded at this time. I will turn the call over to the Head of Investor Relations, Tricia Tuntman. Please proceed.

Good morning, and welcome to the Little Fuse Third Quarter 2021 Earnings Conference Call. With me today are Dave Hindsman, President and CEO, and Nino Sethna, Executive Vice President and CFO. Yesterday, we reported results for our third quarter, and a copy of our earnings release and slide presentation is available in the Investor Relations section of our website. A webcast of today's conference call will also be available on our website. Please advance to slide two for our disclaimers. Our discussion today will include forward-looking statements. These forward-looking statements may involve significant risks and uncertainties. Please review yesterday's press release and our Forms 10-K and 10-Q for more detail about important risks that could cause actual results to differ materially from our expectations. We assume no obligation to update any of this forward-looking information. Also, our remarks today refer to non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided on our earnings release available in the Investor Relations section of our website. I will now turn the call over to Dave.

Thank you, Tricia. Good morning, and thanks for joining us today. Let's start with slide four. We delivered a quarter of outstanding performance with our ability to effectively execute within this challenging supply chain environment. Building on our strength over the past several quarters, our highly skilled teams are continuously improving our global operations to meet customer demand, and our results reflect their commitment and hard work. We achieved record third quarter performance with sales of $540 million and adjusted EPS of $3.95. MENA will provide additional color on our strong financial results. Moving on to performance within our segments. During the third quarter, our electronics product segment experienced strong revenue growth. Our performance was driven by our ongoing operational execution and capacity additions coming online to work through our customer backlog. We drove exceptional production volumes and high shipments to North America, where bookings have been strong. Globally, we continued strength across a broad range of applications, including data center and telecom infrastructure, factory and building automation, appliances, and automotive electronics driven by EV applications. Global sales remained strong, and exiting the third quarter, our electronics book-to-bill remained above one. But we do see some slowing in bookings in China. There is some evidence of electronics in customers building inventory, and distribution partners are working to increase inventory levels. However, weeks of inventory remain lean. Moving on to our automotive product segment, we achieved solid growth within a difficult supply chain environment for the past thanks to the hard work of our global teams. Our third quarter performance was impacted by customer shutdowns in all regions, with the ongoing chip shortage. Despite this, our passenger vehicle business grew 13% versus last year, while global car bill declined. Our growth was driven by a continued content growth in electric vehicles, the favorable mix of higher-end vehicles, and share gains in China on low voltage systems. Although a less significant factor, we are also seeing some customer inventory build coming from partially built cars not reflected in car build data, and some inventory build at tier ones. There continues to be strong demand across the commercial vehicle end markets. However, we are seeing similar supply chain disruptions across suppliers and customers. Demand for our commercial vehicle products was driven by strength in material handling, truck and bus, and construction and agriculture equipment markets. Looking ahead, we expect ongoing supply shortages and customer shutdowns. This is further validated by the significantly lower industry car build forecast of 75 million cars, which reflects nearly flat car builds year on year. Beyond this noisy backdrop, we see a number of ongoing costs and commercial vehicle and markets we serve. Turning to our industrial product segment, a number of our core markets continue to show strength during the third quarter, primarily HVAC, renewables, energy storage, and general industrials. Mining continues to improve, and non-residential construction and North America oil and gas markets are seeing pockets of recovery. Going forward, we expect continued solid demand with typical seasonal softness in HVAC and MRO markets. Turning now to acquisition activity on slide five, I'm pleased to report that on October 20th, we made further progress on our growth strategy with our announcement to acquire Carling Technologies, a global leader in switching, circuit protection, and power distribution technologies. With its strong brand name and a long history of innovation, quality, and reliability, Carling enhances our presence and growth in commercial vehicle and telecom infrastructure markets through our complementary engineering capabilities, application expertise, and product portfolios. This will allow us to drive deeper engagement with a broader base of customers and distribution partners, enhancing our platform for future growth. We are excited to welcome Carling employees to the Little Juice team and expect to close the transaction during the fourth quarter of 2021. Carling will operate within our commercial vehicle business, incorporated in our automotive product segment. We look forward to discussing further during our fourth quarter earnings call. Now let's move on to key design wins in the end markets we serve. Within our industrial end markets, on slide six, we are seeing strong design wins with the growing momentum and sustainability. For HVAC applications, we continue to benefit from the integration of our Hartman Controls acquisition. In North America, we had design win for an industrial refrigeration application and leveraged a product from the Hartman Controls portfolio to secure a design win for an energy storage application. We also captured new business for energy storage and renewable energy applications across Asia, Europe, and North America. With our reputation for service, reliability, and support, we also had industrial safety design wins in North America for oil and gas and mining applications, as well as a ground fault protection win with a U.S. equipment manufacturer. Turning to our transportation intermarkets on slide seven, We leveraged our strong customer relationships and technical know-how to close out dozens of business opportunities in the quarter. We continue to invest in e-mobility and are seeing robust design activity in the EV space and secured several strategic wins in the quarter. In India, we had wins for two- and three-wheeled EV applications with protection products as well as a temperature sensor for an EV battery management system. We also secured onboard high-voltage EV wins in Korea and Europe, as well as a major win for a charging application in Europe. Within commercial vehicles, we had an important design win for our high-voltage power distribution module with a European electric bus manufacturer. We secured this win based on our engineering capabilities and successful record on a previous project. We expect the ongoing push towards electrification to drive significant new business opportunities for us, and we are excited to be a key enabler of a more sustainable and safer world. Globally, as new OEM programs for traditional passenger vehicles continue to drive greater content for our reliable protection products, we secured a wide range of design wins with a broad set of customers. With the ongoing electronification of transportation applications, we had automotive electronics wins in the quarter, securing new business in Asia for LED lighting, dashboard, and camera applications. In Japan and China, we had design wins to protect window, door, and seat motor applications. We also secured an automotive sensor win in Europe for a solar sensor application. Within commercial vehicles, we had several design wins in the quarter in construction equipment applications. Our strong customer relationships and ability to respond to customers' needs helped secure a win in North America with a global manufacturer and in China based on our high-quality product performance over a lower-cost alternative. We also secured a sensor assembly win in Europe for a heavy truck fuel heater application. In addition, design activities and material handling remain solid. With our deep partnerships, we leveraged the success of a prior win to expand our business with a European forklift manufacturer. On to slide eight. With a strong mix of product features and our reputation for industry-leading technical support, we continue to see robust design wins across a wide spectrum of applications in our electronics and markets. Driven by the ongoing trend towards a more connected world, we had two strategic data center wins in Asia, one for a network server application and the other for an uninterruptible power supply application. We secured appliance wins during the quarter in Asia and Europe and a building solutions win in North America. As the power tool market shifts from combustion engines to electrification with the focus on sustainability, we are seeing expanded content opportunities for our products. With rapid technical support, we had design wins for power tools in Asia and in North America. And separately in Europe, we secured a silicon carbide opportunity for a power supply application on a semiconductor manufacturing tool. Across the high-growth industrial, transportation, and electronics applications we target, serve, and support, we are building a pipeline of new business opportunities that aligns with our long-term growth strategy. As we continue to work closely with our customers, we remain well-positioned to provide the innovative solutions and technical expertise they require to empower a sustainable, connected, and safer world. These value-added attributes will enable us to secure our new business opportunities and ultimately grow our collective businesses for the long term. I will now turn the call over to Minal to provide additional color on our financial performance at Outlook.